A Fort Collins investor seized the chance to buy a Class A office building on the Harmony Road corridor for $9.6 million.
Brinkman Capital bought Preston Center, a 57,287-square-foot building at 2809 E. Harmony Road in Fort Collins, from an affiliate of LNR Partners LLC. The price per sf was $157.58.
“This was an opportunity to invest in an 85 percent-leased, high-quality suburban office building in the heart of a fast-growing city north of Denver in order to take advantage of substantially below-market in-place rents, which will lead to outsized returns over time,” said David Tilton of Avison Young’s Denver office. Tilton and fellow Avison Young principal Rick Egitto, along with Avison Young Associate Sam Crowe, represented the seller in the transaction.
“The growth of business along the Harmony corridor has always been a goal for us as a company,” said Kevin Brinkman, CEO of Brinkman Capital. “We’re excited about making improvements to this property that will revitalize interest in the vacant units and bring a new state-of-the-art office location to south Fort Collins.”
Immediate improvements will include rebuilding the entryway and redecorating the interior for a more modern feel, said Brinkman. “Our property management team is excited for the opportunity to build relationships with the current tenants and create an energizing workspace for them.”
Preston Center’s tenants include Comcast, which occupies most of the top floor, Cornerstone Home Lending, which leases the second floor, as well as Progressive Insurance and Everitt Cos.
Preston Center was built in 2001. In-place rents average about $13 per sf triple net, while rents for Class A space in the vicinity are $18 to $21 per sf triple net, according to Tilton. Vacancy is anywhere between 2 to 4 percent, so, “It’s a very tight market,” he said.
“There was a lot of interest from a diverse group of buyers,” said Tilton, adding that, while more product has come on the market for sale lately, little was available for most of the year. Also, the smaller size of the asset made it accessible to a larger buyer pool.
“The investor was able to purchase a building in a very solid office submarket for slightly more than half of what it would cost to construct, in a location that cannot be duplicated,” added Egitto. “Brinkman Capital, based in Fort Collins, was a very logical buyer given its background in office construction and this submarket specifically.”
